Posts for 'ESPN'

The college football season hasn't yet officially begun, but the Southeastern Conference (SEC) has already fumbled the ball a couple of times with its confusing new media policy which bans fan-generated videos at games.

The confusion began when the SEC told its member universities that "Ticketed fans can't produce or disseminate (or aid in producing or disseminating) any material or information about the Event, including, but not limited to, any account, description, picture, video, audio, reproduction or other information concerning the Event." As Mashable and others noted, the policy effectively - and bizarrely - barred all social media activity at games. The policy was widely translated to mean that Facebook updates, Tweets, photo uploads and of course YouTube clips would be verboten.

But, faced with a sharp backlash, the SEC softened its stance, allowing "personal messages and updates of scores or other brief descriptions of the competition throughout the Event." Further, it allowed photos to be taken, as long as their "distributed solely for personal use..." But while Twitter, Facebook and the like would be allowed under the new policy, fan-recorded game action videos would still be prohibited.

In an interview with The Buzz Manager Blog, Charles Bloom, the SEC's Associate Commissioner of Media Relations explained, "the intent of the policy....is trying to protect our video rights, as they pertain to our television and media partners. So, someone in the stadium can enter Twitter feeds or Facebook entries and photographs, but the game footage video is something that we will try to protect." He added further "We're in the new year, the first year of our television and digital rights agreement, so there was a feeling that we needed to push this through pretty quickly..."

The SEC indeed has two big money contracts - a $2 billion, 15 year deal with ESPN, and an $800M+, 15 year deal with CBS, which includes an assortment of wireless, VOD, and data rights. The SEC also recently announced a partnership with XOS Digital to launch the SEC Digital Network, intended to be the "largest online library of exclusive and comprehensive SEC sports content available anytime, anywhere." With so much on the line, the SEC pursued the hardline path - pre-emptively prohibiting fan-generated video.

Is this a smart policy? Does fan-generated video really "compete" with professionally-captured video? And is the policy even enforceable? I'd argue the answers are no, no and no, making the SEC look both paranoid and out of touch.

First off, fan video serves to enhance the overall event experience, a key goal of the sports-crazy SEC. One can imagine fans at various locations in the stadium capturing compelling new angles that the TV producers may have missed or edited out. A curated collection of these clips could be added to the SEC Digital Network, possibly in a well-marked, "Fan Zone." Note this would be free content the SEC would be getting, that could also be monetized.

Second, it's ridiculous to think fan-generated video "competes" with the networks' feed. The limited zoom and audio capabilities of an iPhone or Flip video camera mean the fan videos captured in a raucous 90,000+ seat stadium are going to be iffy at best. That's not to say these videos won't have value, but please - nobody is going to turn off their HDTV to watch some fan's live stream. At some point technology may evolve so that a fan's inexpensive video camera can produce comparable video to a professional's; but that point is still a ways off.

Third, the video policy is impossible to enforce. Is security at the stadiums going to frisk students before entering and then confiscate phones with video capabilites, while letting others pass through? All while it tries to hustle tens of thousands of rambunctious fans through the gates? Bedlam would result.

While the SEC rightfully wants to protect the value of its TV contracts, its lack of understanding for how its policy plays out in the real world is plainly obvious. If the SEC - and others - looked at social media and user-generated video as an opportunity rather than a threat then the policies they created would make a lot more sense.

What do you think? Post a comment now.

Below is the 23rd edition of the VideoNuze Report podcast, for July 2, 2009.

This week Daisy shares additional information about ESPN's Ad Lab for emerging media. The Ad Lab, which was first disclosed by ESPN last year, is intended to various ad formats in the ESPN video player. It is one of many different tests and research projects in the market. As Daisy and I say, everyone's trying to learn how best to monetize the nascent online video; this creates a lot of valuable data, which market participants then need to parse through to fully understand.

I get into further details on my post yesterday, "Video Companies Raised $64M in Q2 '09, Notching Another Stellar Quarter." Despite the recession and the slowdown in venture capital investments, at least 26 industry companies have raised at least $219M over the last 3 quarters, which is impressive by any measure. Still, it hasn't been easy, and one indicator of what investors prefer is that not one of the 26 investments is in a content provider or video aggregator.

Click here to listen to the podcast (14 minutes, 24 seconds)

(Note, with vacations planned, our next podcast will be July 24th)

Click here for previous podcasts

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Late yesterday's announcement that Disney-ABC and ESPN would launch a number of ad-supported channels focused on short-form content was yet another meaningful step in broadband video's maturation process. Here are 6 reasons why I think the deal matters:

1. It validates YouTube as a must-have promotional and distribution partner

For many content providers it's long since become standard practice to distribute clips, and often full-length content, on YouTube. Yet aside from CBS, no broadcast TV network has seriously leveraged YouTube. That's been a key missed opportunity, as YouTube is simply too big to ignore. It's not just that YouTube notched 100M unique viewers in Feb. '09 according to comScore, it's that the site has achieved dramatically more market share momentum over the past 2 years than anyone else, increasing from 16.2% of all streams to 41% of all streams.

Increasingly, YouTube is not the 800 pound gorilla of the broadband video market; it's the 8,000 pound gorilla. Disney has acknowledged what has long been tacitly understood - as a video content provider, it's impossible to succeed fully without a YouTube relationship.

2. It creates a path for full-length Disney-ABC programming to appear on YouTube and elsewhere

While this deal only contemplates short-form video, and more than likely, mostly promotional clips, it almost certainly creates a path for full-length episodes to appear as well, as the partners build trust in each other and learn how to monetize. Full-length content is most likely to come from ABC, not ESPN (the release pointedly states no long-form content from ESPN's linear networks is included) as part of a newly expanded distribution approach.

For YouTube, which has been aggressively evolving from its UGC roots in its quest to generate revenues, the current clip deal alone is a big win; gaining distribution rights to full-length programs would be an even more significant step. Underscoring YouTube's flexibility, the current deal allows ESPN's player to be embedded, and for Disney-ABC to retain ad sales. YouTube's reported redesign, which places more emphasis on premium content, is yet another way it is getting its house in order for premium content deals.

3. It opens up a new opportunity for original short-form video to flourish

When you think about broadcast TV networks and studios, you immediately think of conventional long-form content. Yet all of these companies have been producing short-form content that either augments their broadcast programs, or is originally produced for broadband, as Disney's own Stage 9 is pursuing. The levels of success of this content have been all over the board.

With YouTube as a formal partner, Disney can aggressively leverage it as its primary distribution platform, gaining more direct access to this vast audience. Facing unremitting market pressures on many fronts, broadcast TV networks themselves need to reinvent their business models. Short-form original content married to strong distribution from YouTube would be a whole new strategic opportunity.

4. It puts pressure on Hulu and other aggregators

It's hard not to see YouTube's gain as Hulu's - and other aggregators' - loss. For sure nothing's exclusive here, and as PaidContent has reported, discussions about Disney distributing full-length programs on Hulu (as well as YouTube) are also underway. But the Disney deal underscores something important that differentiates YouTube from Hulu: YouTube is both a massive promotional vehicle and a potential long-form distributor, while Hulu is really only the latter.

YouTube's benefit derives from its first-mover status. Hulu has done a tremendous job building traffic and credibility in its short life, but it is still distant to YouTube in terms of reach. I continue to believe it is far easier for YouTube to evolve from its UGC roots to become also become a premium outlet than it is for Hulu - or anyone else - to ever compete with YouTube's reach.

5. It raises threat warning to incumbent service providers by another notch

It's also hard not to see the Disney deal moving YouTube's threat level to incumbent video service providers (cable/satellite/telco) up another notch. We discussed YouTube's importance to these companies at the Broadband Video Leadership Evening 2 weeks ago (video here), and I thought the panelists generally did not give YouTube much credit as it deserves.

I continue to believe that of all the various "over-the-top" threats to the current world-order, YouTube is the most meaningful ad-supported one. It has massive audience, a potent monetization engine in Google's AdWords, and with the Disney deal, increased credibility with premium content providers. Especially for younger audiences, the YouTube brand means a lot more than any incumbent service provider's. If I were at Comcast, Verizon or DirecTV, I'd be keeping very close tabs on YouTube's evolution.

6. It exposes the absurdity of the ongoing Viacom-Google litigation

Two weeks ago at the Media Summit I listened to Viacom CEO Philippe Dauman describe the status of his company's $1 billion lawsuit against Google and YouTube. As he talked of mounds of data and reams of documentation being collected and reviewed, I found myself slumping in my chair, thinking about how well all the lawyers involved in the case must be doing, and yet how pointless it all seems.

The old adage "2 wrongs don't make a right" fits this situation perfectly. There is no question that in the past YouTube was lax about enforcing copyright protection on its site and cavalier about how it responded publicly to the concerns of rights-holders. But it has made much progress with its Content ID system and a good faith effort to become a trusted partner. All of this is evidenced by the fact that Disney wouldn't even be talking to YouTube, much less cutting a deal, if it didn't view YouTube as reformed. While the media world is moving on, adapting itself to the new rules of video creation, promotion and distribution, Viacom continues to waste resources and executive attention pursuing this case. To be sure, Viacom has been plenty active on the digital front, but it is long overdue that these companies figure out how to resolve their differences and instead focus on how to work together to generate profits for themselves, not their lawyers.

What do you think? Post a comment now.

Two questions I like to ask when I speak to industry groups are, "Raise your hand if you'd be interested in 'cutting the cord' on your cable TV/satellite/telco video service and instead get your TV via broadband only?" and then, "Do you intend to actually cut your cord any time soon?" Invariably, lots of hands go up to the first question and virtually none to the second. (As an experiment, ask yourself these two questions.)

I thought of these questions over the weekend when I was catching up on some news items recently posted to VideoNuze. One, from the WSJ, "Turn On, Tune Out, Click Here" from Oct 3rd, offered a couple examples of individuals who have indeed cut the cord on cable and how their TV viewing has changed. My guess is that it wasn't easy to find actual cord-cutters to be profiled.

There are 2 key reasons for this. First it's very difficult to watch broadband video on your TV. There are special purpose boxes (e.g. AppleTV, Vudu, Roku, etc.), but these mainly give access to walled gardens of pre-selected content, that is always for pay. Other devices like Internet-enabled TVs, Xbox 360s and others offer more selection, but are not really mass adoption solutions. Some day most of us will have broadband to the TV; there are just too many companies, with far too much incentive, working on this. But in the short term, this number will remain small.

The second reason is programming availability. Potential cord-cutters must explicitly know that if they cut their cord they'll still be able to easily access their favorite programs. Broadcasters have wholeheartedly embraced online distribution, giving online access to nearly all their prime-time programs. While that's a positive step, the real issue is that cord-cutters would get only a smattering of their favorite cable programs. Since cable viewing is now at least 50% of all TV viewing (and becoming higher quality all the time, as evidenced by cable's recent Emmy success), this is a real problem.

To be sure, many of the biggest ad-supported cable networks (MTV, USA, Lifetime, Discovery) are now making full episodes of some of their programs available on their own web sites. But these sites are often a hodgepodge of programming, and there's no explanation offered for why some programs are available while others are not. For example, if you cut the cord and could no longer get Discovery Channel via cable/satellite/telco, you'd only find one program, "Smash Lab" available at Discovery.com. Not an appealing prospect for Discovery fans.

Then there's the problem of navigation and ease of access. Cutting the cord doesn't mean viewers don't want some type of aggregator to bring their favorite programming together in an easy-to-use experience. Yet full streaming episodes are almost never licensed to today's broadband aggregators. Cable networks are rightfully being cautious about offering full episodes online to aggregators not willing to pay standard carriage fees.

For example, even at Hulu, arguably the best aggregator of premium programming around, you can find Comedy Central's "The Daily Show" and "Colbert Report." But aside from a few current episodes from FX, SciFi and Fuel plus a couple delayed episodes from USA like "Monk" and "Psych," there's no top cable programming to be found.

As another data point, I checked the last few weeks of Nielsen's 20 top-rated cable programs and little of this programming is available online either. A key gap for cord-cutters would be sports. At a minimum, they'd be saying goodbye to the baseball playoffs (on TBS) and Monday Night football (on ESPN). In reality, sports is the strongest long-term firewall against broadband-only viewing as the economics of big league coverage all but mandate carriage fees from today's distributors to make sense.

Add it all up and while many may think it's attractive to go broadband only, I see this as a viable option for only a small percentage of mainstream viewers. Only when open broadband to the TV happens big time and if/when cable networks offer more selection will this change.

What do you think? Post a comment now.

More evidence this morning of the Syndicated Video Economy playing out, as Disney is announcing it will distribute both ABC and ESPN programming to Veoh, the broadband video aggregator. This follows ESPN's first and recent syndication deal with AOL.

Last week in "Disney/ABC's Cheng is Confident About Broadband Video Advertising," I explained how Disney places a huge emphasis on its video player, so that it can present a consistent user experience and also control advertising. The Veoh deal is aligned with that thinking. Veoh users are exposed to Disney programming, but once they want to view, the Disney video player launches.

In fact it's interesting, if you compare what's been implemented so far at Veoh vs. how ABC shows come up at Hulu (an aggregator that Disney does not have a deal with), there's not that much difference. Recall that Hulu is just taking a feed of Disney's program-related metadata, but again, if you actually want to view, you'll launch the Disney video player.

I'm guessing the major difference here, and why some money changes hands with Veoh, but not Hulu, is that Veoh must be making some kind of commitment to promote Disney programs. Though you never want to judge a deal by how it's implemented on day 1, for now Disney doesn't seem to getting much visibility. I noticed a Jimmy Kimmel thumbnail rotate through the Veoh home page, but when I drilled down through the "TV Shows" and "Channel" tabs, I didn't see any extra promotion of ABC programs. In fact the only ABC program even listed in Veoh's generic alphabetized directory was "Ugly Betty." I found a few full-length episodes when I drilled down through an "ABC" link I found with the Kimmel video, but couldn't find that link anywhere else.

All of this is a reminder that there's a very interesting minuet going on between established networks looking to broaden their online reach and the big video aggregators that have grown dramatically and raised lots of money, but are still unprofitable. The Disney-Veoh deal shows that aggregators may be willing to agree to networks' desires for online control in exchange for the potential to generate high-margin promotion-based revenue (remember they're not hosting or delivering the Disney video, so for Veoh in this case there's very little expense involved) and incremental on-page ad revenue. Of course too many of these kinds of implementations and the aggregator's user experience will look quite inconsistent.

No doubt there will be many more network-aggregator deals yet to be done, demonstrating how this market will eventually shape up.

In my recent post "Revisiting the Long Tail and Broadband" I explained how broadband is the next step in an evolution of video distribution systems and that now, after many years of growth, cable networks' niche, but collective audiences are exceeding those of the broadcasters.

Several readers emailed suggesting I append an important footnote to this analysis: there is a key business model difference between today's fledgling broadband video providers and cable networks. That difference is that cable networks benefit from monthly "sub fees" or "affiliate fees" that all distributors (cable TV and satellite operators, telcos, etc.) must pay to carry cable's programming. These fees are collected in addition to the advertising these networks sell. No such sub fees are available to broadband video providers (or broadcasters for that matter), at least not yet.

Having been in and around the cable industry for 20 years, I fully appreciate that sub fees matter a lot to cable networks. Since the beginning of the cable industry, they have served as a financial firewall for networks. Sub fees now range from pennies per month to over $3 for ESPN. Even on the low-end a "fully distributed" cable network (reaching approximately 80 million+ U.S. homes) reaps millions of sub fee dollars per month. And remember, that money comes in regardless of how well the network's ratings were that month. (btw, for an explanation of the genesis of sub fees, have a look at "Cable Cowboy," Mark Robichaux's biography of TCI's John Malone).

Cable networks' financial security continues to be translated into improved programming quality. Recently, in "Golden Age for TV? Yes, on Cable," the NY Times' David Carr lamented that broadcast TV seems to be on a degenerative slide to offer "all manner of contests and challenges," yet noted that cable is ascendant with Emmy and Oscar-winning talent dotting its innovative new dramas. No surprise to anyone, financial muscle translates into programming quality.

All this helps to explain why, whenever I moderate a panel including cable network executives, they fall all over themselves to declare their allegiance to their current, paying distributors. Cable networks are stepping gingerly into the broadband era, careful not to upset their enviable business model.

Conversely, broadband upstarts have no incumbent customers to consider. While this frees them to strike creative and wide-ranging distribution deals, as best I can tell, they're going to be totally dependent on advertising for a long time to come. This is why I continue urging that broadband video advertising must mature further, and fast.

While broadband upstarts scramble and broadcasters struggle, cable networks will keep chugging along, nicely fueled by their consistent sub fees.

You'd have to have slept through yesterday to miss the big news that ESPN is now syndicating video clips from a cluster of its programs to AOL, its first-ever such deal. I interpret the deal as an extremely strong indicator that the "Syndicated Video Economy" (as I described this trend 3 weeks ago) is inexorable, even for the richest and most powerful video brands.